Barloworld Says 2013 Mining Equipment Sales to Drop

Barloworld Ltd. (BAW), Africa’s largest forklift dealer, forecast global industry sales of new mining equipment will drop 25 percent in 2013 after reaching a record in the fiscal year that’s just ended.

“New equipment sales are cyclical, whereas the sale of new parts and servicing are more static,” Chief Executive Officer Clive Thomson said in an interview in Johannesburg last week. “We expect growth in servicing and sales of new parts.”

Expectations for lower unit sales follow a smaller order book in the year ended Sept. 30, Thomson said. Companies selling mining gear saw record sales in 2012 and he said he expects new equipment sales to still be ahead of 2011 results, without giving any specific forecasts.

While sales to South African mines contribute about 18 percent to the company’s profit, Barloworld isn’t directly affected by the strikes disrupting mines in the country. That’s because most of its customers have open-cast operations, rather than underground platinum or gold mines, Thomson said.

About 39 percent of the country’s gold production was halted last week as strikes in the industry spread. Gold workers, encouraged by a 22 percent pay increase that ended an unofficial strike at Lonmin Plc (LMI), have joined coal miners in walkouts.

Barloworld, which has Caterpillar (CAT) Inc. dealerships in Russia, Spain, Portugal and 12 sub-equatorial African countries, expects revenue to rise to “around 60 billion rand” ($7.2 billion) for the year through September, compared with 49.8 billion rand last year, Thomson said.

Barloworld, which has sold Caterpillar equipment since 1927, bought Bucyrus International Inc.’s distribution and support units in South Africa and Botswana from Peoria, Illinois-based Caterpillar for $175 million in July. The company wants to expand in underground mining, Thomson said. It expects the two units to add $335 million to $385 million to 2013 revenue.

To contact the reporter on this story: Jaco Visser in Johannesburg at avisser3@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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